-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OZo/HF5x8nW8SG7Z8lckFYg7BKO3JTtqK7YF3CUDp3vaYvEAM+N6hye2EtZ0HvNA 5f4MpxB0pj6c7W98gpYvyw== 0000910195-96-000237.txt : 19961216 0000910195-96-000237.hdr.sgml : 19961216 ACCESSION NUMBER: 0000910195-96-000237 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961031 FILED AS OF DATE: 19961213 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MILLER INDUSTRIES INC /TN/ CENTRAL INDEX KEY: 0000924822 STANDARD INDUSTRIAL CLASSIFICATION: TRUCK & BUS BODIES [3713] IRS NUMBER: 621566286 STATE OF INCORPORATION: TN FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-14124 FILM NUMBER: 96680493 BUSINESS ADDRESS: STREET 1: 900 CIRCLE 75 PARKWAY CITY: ATLANTA STATE: GA ZIP: 30339 BUSINESS PHONE: 7709880797 MAIL ADDRESS: STREET 1: 900 CIRCLE 75 PARKWAY STREET 2: SUITE 1250 CITY: ATLANTA STATE: GA ZIP: 30339 10-Q 1 FORM 10-Q FOR MILLER INDUSTRIES, INC./TN SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 31, 1996 Commission File No. 0-24298 MILLER INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Tennessee 62-1566286 - ------------------------------- ------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 900 Circle 75 Parkway Atlanta, Georgia 30339 ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (770) 988-0797 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO --- --- The number of shares outstanding of the registrant's Common Stock, $.01 par value, as of December 4, 1996 was 25,374,939. MILLER INDUSTRIES, INC. INDEX PART I. FINANCIAL INFORMATION Page Number Item 1. FINANCIAL STATEMENTS (UNAUDITED) Condensed Consolidated Balance Sheets - October 31, 1996 and April 30, 1996 3 Condensed Consolidated Statements of Income for the Three Months and Six Months Ended October 31, 1996 and 1995 4 Condensed Consolidated Statements of Cash Flows for the Six Months Ended October 31, 1996 and 1995 5 Notes to Condensed Consolidated Financial Statements 6 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 10 PART II. OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K 12 SIGNATURES 13 2 MILLER INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data)
ASSETS October 31, April 30, 1996 1996 ---------- ----------- (Unaudited) CURRENT ASSETS: Cash $ 12,535 $ 24,592 Accounts receivable, net 39,002 31,750 Inventories 44,238 32,428 Deferred income taxes 1,371 1,338 Prepaid expenses and other 1,216 1,095 ----------- --------- Total current assets 98,362 91,203 ----------- --------- PROPERTY, PLANT AND EQUIPMENT, net 19,004 16,555 GOODWILL, net 6,835 5,071 ----------- --------- PATENTS, TRADEMARKS AND OTHER PURCHASED PRODUCT RIGHTS, net 1,447 926 OTHER ASSETS 3,178 250 ----------- --------- Total assets $ 128,826 $ 114,005 =========== ========= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt $ 5,422 $ 1,101 Line of credit 819 1,143 Accounts payable 27,373 27,427 Accrued liabilities 10,857 9,636 ----------- --------- Total current liabilities 44,471 39,307 ----------- --------- LONG-TERM DEBT, less current portion 7,165 5,865 ----------- --------- DEFERRED INCOME TAXES 960 870 ----------- --------- STOCKHOLDERS' EQUITY (Note 2): Preferred stock, $.01 par value, 5,000,000 shares authorized; none issued or outstanding 0 0 Common stock, $.01 par value, 100,000,000 shares authorized; 24,051,621 and 23,848,522 shares issued and outstanding, respectively 241 238 Additional paid-in capital 57,287 54,859 Retained earnings 18,702 12,866 ----------- --------- Total common stockholders' equity 76,230 67,963 ----------- --------- Total liabilities and stockholders' equity $ 128,826 $ 114,005 =========== =========
See accompanying notes to condensed consolidated financial statements. 3 MILLER INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share data) (Unaudited)
Three Months Ended Six Months Ended October 31, October 31, ------------------ ----------------- 1996 1995 1996 1995 ---- ---- ---- ---- NET SALES $ 62,308 $ 39,363 $ 111,647 $ 75,857 COST OF SALES 52,053 32,736 93,158 63,504 ---------- -------- --------- --------- GROSS PROFIT 10,255 6,627 18,489 12,353 OPERATING EXPENSES: Selling 3,021 1,898 5,533 3,706 General and administrative 2,176 1,538 3,887 2,937 ---------- -------- --------- --------- INCOME FROM OPERATIONS 5,058 3,191 9,069 5,710 INTEREST INCOME (EXPENSE), net 122 (91) 271 (208) ---------- -------- --------- --------- INCOME BEFORE INCOME TAXES 5,180 3,100 9,340 5,502 PROVISION FOR INCOME TAXES 1,973 1,066 3,504 1,994 ---------- -------- --------- --------- NET INCOME $ 3,207 $ 2,034 $ 5,836 $ 3,508 ========== ======== ========= ======== NET INCOME PER COMMON SHARE $ 0.13 $ 0.10 $ 0.23 $ 0.17 ---------- -------- --------- -------- WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 25,562 20,701 25,365 20,697 ========== ======== ========= ========
See accompanying notes to condensed consolidated financial statements. 4 MILLER INDUSTRIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (UNAUDITED)
SIX MONTHS ENDED OCTOBER 31, ---------------------------- 1996 1995 ------- -------- OPERATING ACTIVITIES: Net income $ 5,836 $ 3,508 -------- -------- Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 733 390 Changes in operating assets and liabilities: Accounts receivable (5,610) (1,514) Inventories (6,116) (1,884) Prepaid expenses and other 24 (78) Accrued liabilities 853 486 Accounts payable (3,129) 168 Other assets (2,893) 120 --------- -------- Total adjustments (16,138) (2,312) --------- -------- Net cash provided by (used in) operating activities (10,302) 1,196 --------- -------- INVESTING ACTIVITIES: Purchases of property, plant and equipment (339) (1,997) Other, including cash acquired in acquisitions 201 0 --------- -------- Net cash used in investing activities (138) (1,997) --------- -------- FINANCING ACTIVITIES: Payments under line of credit (300) (959) (Payment) proceeds of long-term debt (1,429) 604 Proceeds from exercise of stock options 112 9 --------- -------- Net cash used in financing activities (1,617) (346) --------- -------- NET DECREASE IN CASH (12,057) (1,147) CASH, beginning of period 24,592 2,972 --------- -------- CASH, end of period $ 12,535 $ 1,825 ========= ======== SUPPLEMENTAL NONCASH INVESTING ACTIVITIES: Capital stock issued for acquisitions accounted for using the purchase method of accounting $ (2,300) Fair value of assets acquired 11,772 Liabilities assumed $ (9,472) ==========
See accompanying notes to condensed consolidated financial statements. 5 MILLER INDUSTRIES, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Basis of Presentation The condensed consolidated financial statements of Miller Industries, Inc. and subsidiaries (the "Company") included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. Nevertheless, the Company believes that the disclosures are adequate to make the financial information presented not misleading. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which are of a normal recurring nature, to present fairly the Company's financial position, results of operations and cash flows at the dates and for the periods presented. Interim results of operations are not necessarily indicative of results to be expected for the fiscal year. These condensed consolidated financial statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended April 30, 1996. 2. Common Stock All share numbers, share prices, and per share amounts have been restated to reflect the 3-for-2 stock split which occurred on April 12, 1996 and the 2-for-1 stock split which occurred on September 30, 1996. 3. Inventories Inventory costs include materials, labor and factory overhead. Inventories are stated at the lower of cost or market, determined on a first-in, first-out basis. Inventories at October 31, 1996 and April 30, 1996 consisted of the following (in thousands): October 31, April 30, 1996 1996 ----------- ---------- Chassis $ 14,388 $ 7,188 Raw Materials 11,145 11,505 Work in process 7,336 7,155 Finished goods 11,369 6,580 --------- --------- $ 44,238 $ 32,428 ========= ========= 6 4. Net Income Per Common Share Net income per common share is computed by dividing net income by the weighted average number of common and common equivalent shares outstanding. 5. Business Combinations In July 1996 the Company issued approximately 198,000 shares of its common stock in exchange for all of the outstanding common stock of two towing equipment distributors with historical revenues of approximately $17 million annually. In September 1996 the Company issued approximately 507,000 shares of its common stock in exchange for all of the outstanding common stock of Vulcan International, Inc. ("Vulcan"). Vulcan is a manufacturer of towing and recovery equipment with historical revenues of $22 million annually. These three entities are collectively referred to as the "Pooled Entities". These mergers have been accounted for as poolings of interests and, accordingly, the Company's financial statements have been restated to include the accounts and operations of the Pooled Entities for the periods presented herein. Expenses related to these mergers are included in general and administrative operating expenses. Results of operations of the Company and the Pooled Entities for the periods presented herein are as follows:
Three Months Ended Six Months Ended October 31, October 31, --------------------- --------------------- 1996 1995 1996 1995 --------- --------- --------- --------- Net Sales: Company $ 46,571 $ 29,611 $ 84,369 $ 57,847 Pooled Entities 18,710 10,394 31,899 19,238 Adjustment-Elimination of intercompany sales (2,973) (642) (4,621) (1,228) --------- --------- --------- --------- Combined 62,308 39,363 111,647 75,857 ========= ========= ========= ======== Net Income: Company 2,702 1,706 5,035 3,205 Pooled Entities 505 328 801 303 --------- --------- --------- --------- Combined $ 3,207 $ 2,034 $ 5,836 $ 3,508 ========= ========= ========= =========
In August and September 1996 the Company issued approximately 178,000 shares of its common stock in exchange for all the outstanding common stock of two additional towing equipment distributors with historical revenues of approximately $23 million annually. These two acquisitions were accounted for using the purchase method of accounting. The proforma impact of these acquisitions on net income and earnings per share was not significant for the periods presented herein. 7 6. Legal Matters In January 1996, the Company was awarded a judgment in a patent infringement suit in which the jury found that the defendant manufacturer and distributor of towing equipment willfully infringed both the Company's underlift parallel linkage and L-arm patents. A final judgment was paid to the Company in August 1996 in the amount of approximately $1.8 million, which included enhanced damages for willfulness and pre- and post-judgment interest and a broad permanent injunction against future infringement by the defendants. Defendants were not granted a license to use the Company's L-arm technology. The impact of this payment net of expenses associated with this lawsuit and related patent infringement litigation was not significant to net income for the six months ended October 31, 1996. Subsequent to the end of the quarter, in November 1996 the Company received a verdict in its patent infringement suit against Chevron, Inc., a manufacturer of towing and recovery equipment. The jury awarded damages in the amount of $310,000. The Company will be filing motions for prejudgment interest, as well as an appeal for a new trial on damages. The Company is, from time to time, a party to litigation arising in the normal course of its business. Management believes that none of these actions, individually or in the aggregate, will have a material adverse effect on the financial position or results of operations of the Company. 7. Subsequent Events On November 6, 1996 the Company completed a public offering of 1,295,352 shares of previously unissued common stock at $24.25 per share. The net proceeds will be used to fund capital expenditures including expansion of manufacturing capacity, fund the Company's financial services group, finance future acquisitions and for general corporate purposes including working capital. On December 11, 1996 the Company announced a three-for-two stock split to be distributed on December 30, 1996 to shareholders of record on December 20, 1996. The financial statements herein have not been restated for the split. 8 8. Reclassifications Certain amounts in the prior period financial information have been reclassified to conform to the current presentation. 9 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RECENT DEVELOPMENTS As more fully discussed in Note 5 to condensed consolidated financial statements, in July 1996 the Company acquired two towing equipment distributors. These transactions have been accounted for as poolings of interests and, accordingly, the Company's consolidated financial statements have been restated to include the accounts and operations of Distributors for the periods presented herein. Also, as more fully discussed in Note 5 to condensed consolidated financial statements, in August and September 1996 the Company acquired two additional towing equipment distributors. Additionally, in September 1996 the Company acquired Vulcan International, Inc., a manufacturer of towing and recovery equipment. All five of these transactions were accomplished using common stock of the Company. As more fully discussed in Note 7 to condensed consolidated financial statements, in November 1996 the Company completed a public offering of 1,295,352 shares of previously unissued common stock. RESULTS OF OPERATIONS--THREE MONTHS ENDED OCTOBER 31, 1996 COMPARED TO THREE MONTHS ENDED OCTOBER 31, 1995 Net sales for the three months ended October 31, 1996, increased 58.3% to $62.3 million from $39.4 million for the comparable period in 1995. The increase in net sales was primarily the result of higher unit sales volume, an increase in units sold with the truck chassis included, and sales from the two European manufacturing operations acquired in January and April 1996 and the two towing equipment distributors acquired in August and September 1996, collectively the "1996 Acquisitions". The growth in unit sales volume was a result of continued market growth, market share gains, and the 1996 Acquisitions. Gross profit for the three months ended October 31, 1996, increased 54.8% to $10.3 million from $6.6 million for the comparable period in 1995. Gross profit as a percentage of net sales decreased to 16.5% from 16.8%. This net decrease in gross profit margin resulted primarily from a significant increase in chassis sales which carry a nominal profit margin partially offset by the positive impact of production efficiencies associated with the higher sales level and the price increase implemented in the third quarter of last year. Selling expenses for the three months ended October 31, 1996, increased 59.2% to $3.0 million from $1.9 million for the comparable period of 1995. The increase in selling expenses was due primarily to higher commission expenses resulting from increased sales and from the impact of the 1996 Acquisitions. General and administrative expenses for the three months ended October 31, 1996 increased 41.5% to $2.2 million from $1.5 million for 1995 primarily due to merger expenses related to the pooling transactions and the impact of the 1996 Acquisitions. 10 Overall, operating expenses as a percentage of net sales decreased to 8.3% in the 1996 period from 8.7% in the 1995 period. RESULTS OF OPERATIONS--SIX MONTHS ENDED OCTOBER 31, 1996 COMPARED TO SIX MONTHS ENDED OCTOBER 31, 1995 Net sales for the six months ended October 31, 1996 increased 47.2% to $111.6 million from $75.9 million for the comparable period in 1995. The increase in net sales was primarily due to higher unit sales volume and an increase in units sold together with truck chassis. The growth in unit sales volume was a result of continued market growth, market share gains and the 1996 Acquisitions. Gross profit increased 49.7% to $18.5 million for the six months ended October 31, 1996 from $12.4 million for the comparable period in 1995. Gross profit as a percentage of net sales increased to 16.6% from 16.3%. This net increase in gross profit margin resulted primarily from production efficiencies associated with the higher volume level and the positive impact of the price increase implemented in the third quarter of last year partially offset by an increase in chassis sales which carry a nominal profit margin. Selling expenses increased 49.3% to $5.5 million for the six months ended October 31, 1996 from $3.7 million for the comparable period of 1995. The increase in selling expenses was due primarily to higher commission expenses resulting from increased sales and the impact of the 1996 Acquisitions. General and administrative expenses for the six months ended October 31, 1996 increased 32.4% to $3.9 million from $2.9 million for 1995 primarily due to merger expenses related to the pooling transactions and the impact of the 1996 Acquisitions. Overall, operating expenses as a percentage of net sales decreased to 8.4% in the 1996 period from 8.8% in the 1995 period. Interest income (expense), net improved from a net interest expense of $0.2 million for the six months ended October 31, 1996 to a net interest income of $0.3 million for the comparable period of 1995 as a result of debt repayment and investment of the proceeds of the public offering in January 1996. LIQUIDITY AND CAPITAL RESOURCES The Company's primary capital requirements are for working capital, debt service and capital expenditures. The Company has financed its operations and growth from internally generated funds and debt financing and, since August 1994, in part from the proceeds from its initial public offering and its subsequent public offering completed in January, 1996. 11 Cash flows used in operating activities were $10.3 million for the six month period ended October 31, 1996 as compared to $1.2 million provided by operations for the comparable period of 1995. The decrease in cash flows from operations was primarily the result of timing of disbursements to trade creditors and increases in accounts receivable and inventory levels resulting from the continuing growth in sales. Cash used in investing activities was $0.1 million for the six month period ended October 31, 1996 compared to $2.0 million for the comparable period in 1995. The cash used in investing activities was primarily for capital expenditures and equipment purchases in both periods. Cash used in financing activities was $1.6 million for the six month period ended October 31, 1996 and $0.3 million for the comparable period in the prior year. The cash was used to repay long-term debt and to pay down amounts outstanding under the acquired companies' credit arrangements. The Company has a $25 million unsecured revolving credit facility with NationsBank of Tennessee, N.A. (the "Credit Facility"). Borrowings under the Credit Facility bear interest at a rate equal to the 30-day LIBOR plus 1.0%. At October 31, 1996, no amounts were outstanding under the Credit Facility. The Credit Facility imposes restrictions on the Company with respect to the maintenance of certain financial ratios and specified tangible net worth, the sale of assets, mergers, and the payment of dividends. The Company has recently expanded its Hermitage, Pennsylvania facility and is currently increasing the capacity of its plants in Ooltewah, Tennessee and Olive Branch, Mississippi. Capital expenditures remaining for these expansions and additional equipment are expected to be approximately $2.5 million. The Company intends to purchase or construct a car carrier manufacturing facility. Excluding the capital commitments set forth above, the Company has no other pending material commitments. The Company believes that cash on hand, cash flows from operations and unused borrowing capacity under the Credit Facility will be sufficient to fund its operating needs, capital expenditures and debt service requirements for the next fiscal year. Management continually evaluates potential strategic acquisitions. Although the Company believes that its financial resources will enable it to consider potential acquisitions, additional debt or equity financing may be necessary. No assurance in this regard can be given, however, since future cash flows and the availability of financing will depend on a number of factors, including prevailing economic conditions and financial, business and other factors beyond the Company's control. Part II. OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. Exhibit 27 - Financial Data Schedule (For SEC use only) (b) Reports on Form 8-K - Current report on Form 8-K filed on November 1, 1996. 12 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Miller Industries, Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MILLER INDUSTRIES, INC. By: /s/ Adam L. Dunayer Adam L. Dunayer Vice President and Chief Financial Officer (Principal Financial Officer) Date: December 13, 1996 EX-27 2 FINANCIAL DATA SCHEDULE
5 0000924822 MILLER INDUSTRIES INC./TN 1,000 6-MOS APR-30-1996 AUG-01-1996 OCT-31-1996 12,535 0 39,002 0 44,238 98,362 23,231 4,227 128,826 44,471 7,165 0 0 241 75,989 128,826 111,647 111,647 93,158 102,578 0 0 (271) 9,340 3,504 5,836 0 0 0 5,836 0.23 0.23
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